EUA Dec-26 prices opened significantly lower the morning of February 12, 2026, falling 6.5% after German Chancellor Friedrich Merz suggested the bloc should be “open” to revising, or even postponing, the EU ETS.
The remarks, delivered at an industry summit in Antwerp, immediately weighed on the market. Traders interpreted the comments as a political risk to the integrity of the EU ETS, triggering a sell-off at the open.
Merz said the ETS is not meant to raise revenue but to cut emissions and enable climate-neutral production. If that goal cannot be met, he said, policymakers should reconsider the instrument, recalling the previous delay of ETS2 as precedent. His intervention came just hours after the European Commission President Ursula von der Leyen publicly defended the carbon market on the same stage.
“The Emissions Trading System brings clear benefits,” she told industry leaders, citing a 39% reduction in emissions in ETS-covered sectors since 2005 alongside 71% economic growth in those sectors. She rejected calls to weaken climate policy in the name of competitiveness, arguing that long-term relief for industry lies in reducing fossil fuel dependence, not dismantling carbon pricing.
Similar calls have been circulating for the past couple of weeks. The EUA Dec-26 contract witnessed a EUR 15 plunge, likely driven by investment funds consolidating their net long positions. Yesterday’s Commitment of Traders data for last week showed that speculators had already reduced their net long positions by 6.63 Mt to 94 Mt. Given the large volume of net long positions remaining, downside risk is still elevated.
However, recent industry calls to ease EUA prices and/or slow the phase-out of free allocations suggest that EU officials may be considering supply easing not only post-2030 but potentially also during Phase IV of the EU ETS. According to our analysis, if the Commission introduces 20-60% of the Free Allocation Buffer as additional supply, EUA prices could decline by EUR 2.4-12.95 per year over 2026-2030. While the proposal for the 2026 EU ETS and MSR Review is scheduled for mid-July, shorter-term supply interventions using the Free Allocation Buffer could be discussed earlier. If industry calls intensify, proposals to increase short-term supply could emerge over the next few months.
The EU ETS is again on the agenda of the informal EU leaders’ meeting in Belgium. Any headlines from the meeting could trigger additional market volatility. Moreover, it is expected to provide more clarity on the regulator’s potential next move.
ClearBlue Markets will be following the upcoming developments on possible EU ETS supply reforms closely and publish updates accordingly. Contact us for information about our services for EU markets participants.